ARPU (Average Revenue Per User)
ARPU is the average recurring revenue per active user in a period. It shows how well you turn users into revenue.
Updated October 1, 2026
ARPU (Average Revenue Per User) is the average recurring revenue you earn from one active user in a period, usually a month. Rising ARPU means each user pays more on average. Falling ARPU can mean discounts, downgrades, or more users on cheaper plans.
How to calculate ARPU
Divide recurring revenue for the period by the number of active users in that period.
ARPU = total recurring revenue ÷ active users
Use MRR for a monthly figure. With $28,000 in MRR across 2,000 active users, ARPU is $14/month. For an annual figure, multiply monthly ARPU by 12. Keep both numbers on the same basis, monthly with monthly or annual with annual.
Why ARPU matters
- Pricing. If ARPU stays flat while you ship features, you may be underpriced, or new users may be picking your cheapest plan.
- Segments. Comparing ARPU by plan, region, or channel shows where your most valuable users come from.
- LTV. ARPU times expected customer lifetime gives a quick LTV estimate.
ARPU vs ARPA
ARPU divides by users, and ARPA divides by paying accounts. When one person equals one account, the two are about the same. In B2B products with many seats per account, ARPA is much higher than ARPU. ARPU often grows through expansion revenue as users upgrade or use more.